The Centers for Medicare & Medicaid Services (MS) has issued three final rules outlining 2018 Medicare payment rates for skilled nursing facilities, hospice, and inpatient rehabilitation facilities. The final rules are effective for fiscal year (FY) 2018 and reflect a broader Administration strategy to streamline administrative requirements for providers; support the patient-doctor relationship in healthcare; and promote transparency, flexibility, and innovation in the delivery of care.

“These announcements take important steps to support innovation in the delivery of care in order to promote a Medicare program that is responsive to patients’ unique needs and ensure that patients have access to high-quality skilled nursing, hospice, and inpatient rehabilitative care,” said CMS Administrator Seema Verma. “These rules update quality reporting requirements and allow providers to spend less time and fewer resources on cumbersome paperwork, so they can increase their focus on the needs of Medicare patients.”

Below are key highlights of the three final Medicare payment rules:

The 2018 Skilled Nursing Facility (SNF) Prospective Payment System Final Rule increases Medicare payment rates by 1.0 percent for FY 2018, as statutorily-required by section 411(a) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is an aggregate impact of $370 million from payments in FY 2017. The rule revises and rebases the SNF market basket index by updating the base year data from FY 2010 to 2014 and by adding a new cost category for Installation, Maintenance, and Repair Services. The rule also finalizes updates to the SNF Quality Reporting Program, including replacing the pressure ulcer measure with an updated version, adopting new functional status measures and publicly displaying new measures. In addition, it finalizes policies for the SNF Value-Based Purchasing Program for FY 2019, the first year this program will impact Medicare payments and the requirements regarding the composition of professionals for the survey team.

The 2018 Hospice Update updates FY 2018 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries and hospice quality reporting requirements. The final hospice payment and hospice quality reporting requirements rule reflects the ongoing efforts of CMS to support beneficiary access to hospice care and includes measures that are burden neutral and improve care quality and outcomes for patients. The Medicare payments update to hospices is statutorily-mandated by section 411(d) of the MACRA to be 1.0 percent ($180 million) for FY 2018.

Final Rule updates payment rates for FY 2018 using the most recent available data. The updated IRF prospective payment system payments for FY 2018 reflect a 1.0 percent increase factor, in accordance with section 411(b) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). An additional 0.1 percent decrease to aggregate payments due to updating the outlier threshold results in an overall update for FY 2018 of 0.9 percent (or $75 million) relative to payments in FY 2017. CMS also finalized the removal of the 25 percent payment penalty in order to remove an unnecessary burden on IRFs. Following public comments, CMS finalized the replacement of the current pressure ulcer measure with an updated version of that measure, the removal of the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from IRFs, and the public display of six additional quality measures.